Missouri Bill Introduces Higher Bond Amounts for Car Dealers

Published: Aug 10, 2018
New Missouri Auto Dealer Bond Amount Requirement

 

Missouri auto dealers will soon face several new requirements they must comply with in order to operate legally. As of August 28, 2018, the amount of the Missouri auto dealer bond will increase from $25,000 to $50,000. Prior to that date, licensed and bonded dealers will need to have their bond amount increased. New applicants for a license in the state will just need to obtain the $50,000 bond even if they’re applying before Aug. 28.

Here is a list of all the new requirements that dealers will be facing as of August 28!

Missouri Senate Bill 707

Senate Bill 707 was signed by Missouri governor Mike Parson on July 5, 2018. The Bill introduces several changes to existing sections of the Revised Statutes of Missouri (RSM) that concern auto dealers.

The changes introduced by the bill are as follows:

  • Car dealers in Missouri must furnish and maintain a $50,000 auto dealer surety bond;
  • Dealers must make at least 8 sales per year, instead of 6, in order to be eligible for a license renewal;
  • License applications must now include applicants’ business hours and a phone number and email address, at which an applicant can be reached during business hours;
  • For the duration of their license registration, dealers must maintain a working telephone number and email address at which they may be reached by the public or the Missouri Department of Revenue during business hours;
  • The first plate for new dealers will now cost $50, and every additional plate or certificate will cost $10.50;
  • In cases in which a dealership is sold to a dealer, the latter may request that the Department issue a new license number and plates to them;
  • With certain exceptions, as provided in 301.566. of the RSM, auto dealers cannot conduct sales or offer to conduct sales away from their registered place of business;
  • Auto dealers are allowed to participate in two off-premise motor vehicle shows or sales per year and conduct sales there. See 301.566.4. for a detailed definition of what constitutes an off-premise event;
  • New owners are allowed to use inspections made within 90 days of the purchase date for registration or transfer purposes, even if the vehicle underwent an inspection within 60 days of the date of sale;

These are the main changes introduced to the RSM under Bill 707. The surety bond requirement constitutes the most significant change to current law and will mean higher premiums for dealers. See below for an overview on how your bond cost may change.

New Missouri Auto Dealer Bond Amount

The Missouri auto dealer bond amount will now double. This means that auto dealers will also need to pay a higher cost. Dealers whose personal credit score has not changed much since they last got bonded may expect to have their bond cost also become double. Dealers whose credit score has increased will most likely also see an increase in their bond premium, though this increase will likely not be double.

For new applicants, it may be useful to note that surety bond cost is equal to a percentage of the full bond amount. This percentage, or bond rate, is based on applicants’ credit scores as well as, at times, their financial statements, assets, liquidity, personal resume, etc. Your credit score is the most important factor and the higher your credit score – the lower the rate you are offered by the surety will be. Moreover, by working on improving your credit score over time, you are sure to get increasingly better rates when you apply to renew your bond.

To get an estimate of the cost of your bond, you can try our bond cost calculator below. If you want a precise and free quote on your bond, just complete our bond form, and we will contact you with your quote shortly!

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Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.

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